NEW YORK (TheStreet) -- Deere & Co. (DE) beat on the top and bottom lines, surprising both analysts and investors on Wednesday morning.
David Nelson, chief strategic officer at Belpointe Asset Management told TheStreet's Debra Borchardt Deere earned $2.11 per share, beating estimates by 22 cents, or over 11%. Net profit for the quarter jumped to $806 million versus $687 million in the same period last year. However, management expects equipment sales to decline by 3% next year.
According to Nelson, investors don't seem to care about the guidance, and the stock is higher Wednesday. Deere management continues to do a great job, he said. The company keeps beating on the bottom line thanks to cost controls, among other things.
Shares have been trapped in a range between $80 and $85. Nelson suggested that a close above $86 could possibly signal a breakout in the stock. Deere's forward guidance was better than analysts had expected, roughly 8% higher, but still below 2013's numbers.
He suggested that a lot of farmers were buying equipment this year but the company expects that to slow in fiscal 2014. Value investors have been scooping up shares, anticipating that this is the bottom for Deere stock, Nelson concluded.
-- Written by Bret Kenwell in Petoskey, Mich.